F.B.I. Is Investigating a Senior Counterterrorism Agent

By DAVID JOHNSTON and JAMES RISEN

Published: August 19, 2001

WASHINGTON, Aug. 18—
The F.B.I. has begun an internal investigation into one of its most senior counterterrorism officials, who misplaced a briefcase containing highly classified information last year. The briefcase contained a number of sensitive documents, including a report outlining virtually every national security operation in New York, government officials said.

The official, John O'Neill, 49, is the special agent in charge of national security in the Federal Bureau of Investigation's New York office. The job is among the most powerful in the F.B.I., and, although Mr. O'Neill is not widely known, he has overseen cases like the terrorist bombing of the Navy destroyer Cole in Yemen last year and the bombings of American embassies in East Africa in 1998.

The briefcase incident was seen as potentially so serious that the Justice Department conducted a criminal investigation. The inquiry ended in recent weeks with a decision by the department's internal security section not to prosecute, law enforcement officials said.

Mr. O'Neill left his briefcase in a hotel conference room while he attended an F.B.I. meeting in Tampa, Fla., last summer. The briefcase was stolen, but the local authorities recovered it and returned it to him within hours with the contents.

Jill Stillman, a spokeswoman for the Justice Department, said that department officials would not comment on the matter. Requests to discuss the matter with Mr. O'Neill were made to bureau officials in New York and Washington. In both cases, they said that he declined to comment on the case.

After the criminal inquiry, the bureau's internal affairs unit began its own investigation to determine whether Mr. O'Neill had violated F.B.I. rules against mishandling classified information.

Officials identified one document in the briefcase as a draft of what is known in the bureau as the Annual Field Office Report for national security operations in New York. The closely guarded report contained a description of every counterespionage and counterterrorism program in New York and detailed the budget and manpower for each operation. The document, submitted to bureau headquarters, is used as a central planning tool each year.

F.B.I. agents are prohibited from removing classified documents from their offices without authorization. Violations are punishable by censure, suspension or even dismissal, depending on the seriousness.

But the outcome of the internal inquiry is uncertain. Even if the inquiry finds that Mr. O'Neill violated regulations, he is unlikely to be sanctioned. He has been planning to retire and told associates in recent days that he would step down next week. He is expected to take a job as a private security consultant.

Several officials said that Mr. O'Neill became the subject of especially intense scrutiny partly because law enforcement officials did not want to treat the matter lightly after the cases of John M. Deutch, the former director of Central Intelligence, and Wen Ho Lee, the Los Alamos nuclear weapons scientist.

Mr. Deutch lost his security clearances and was the subject of a Justice Department investigation for mishandling classified material after he placed classified documents on unclassified computers in his home. Mr. Deutch was pardoned by President Clinton in January.

Dr. Lee pleaded guilty in September 2000 to one count of mishandling classified material just as the rest of the government's case against him collapsed.

In Mr. O'Neill's case, F.B.I. officials were alarmed, in part, because of the sensitivity of the documents involved, including details about the bureau's counterterrorism and counterintelligence operations. One document contained highly sensitive information about an F.B.I. source.

Mr. O'Neill immediately reported the incident to his superiors. But after the Tampa authorities recovered the briefcase, it was taken from him and the documents inside it were fingerprinted to determine whether anyone had touched the briefcase and whether the documents might have been handled by a foreign intelligence service.

The investigation concluded that the documents in the briefcase had not been touched and that it had probably been stolen by thieves who were thought to be responsible for several hotel robberies in the Tampa area at the time.

Mr. O'Neill started as an entry-level clerk at the bureau and has been an agent for more than 25 years. Throughout his career, associates said, Mr. O'Neill has been regarded as a dedicated, relentless and hard-charging investigator who was one of the F.B.I.'s brightest stars. But associates said that he sometimes chafed at the restrictive rules of conduct at the bureau and that his single-mindedness had sometimes irritated colleagues in the bureau, at the C.I.A. and at the State Department. Mr. O'Neill's aggressiveness has led to serious frictions in the Cole bombing case, for example.

This year, the United States ambassador to Yemen, Barbara Bodine, blocked Mr. O'Neill from returning to Yemen to oversee the F.B.I. investigation of the bombing of the destroyer Cole. Mr. O'Neill had led the initial team of agents in Yemen after the bombing last fall, but ran afoul of Ambassador Bodine over what she considered his heavy-handed style, State Department officials said. She considered the F.B.I. contingent too large and objected to the agents' insistence on carrying heavy weapons, they said.

But Mr. O'Neill has many admirers. Barry W. Mawn, assistant director of the F.B.I. in charge of the New York office, said that Mr. O'Neill was a tireless worker and had his ''complete confidence'' since Mr. Mawn took over the office last year.

''John is recognized worldwide as probably one of the best in conducting both counterterrorism and counterintelligence operations,'' Mr. Mawn said.

James K. Kallstrom, the head of the New York office in the mid-1990's, said that Mr. O'Neill ''has been a major force for the public safety of the United States and the security of the United States for over two decades.''

Like a number of Mr. O'Neill's friends and supporters, Mr. Kallstrom made clear that he thought Mr. O'Neill had been the victim of a smear campaign by people seeking to damage his reputation, perhaps because he was being mentioned for a national security job at the White House, a job he apparently never sought.

''The notion that individuals in public service or anywhere else are absolutely perfect human beings who never have a fault or lapse of memory or never make a mistake is a standard that no one should be held to,'' Mr. Kallstrom said.

Mary Jo White, the United States attorney for the Southern District of New York, praised Mr. O'Neill in a statement Friday as ''one of the unsung heroes in our nation's efforts to combat terrorism in the United States and around the world.''